Business Process Outsourcing (BPO)


Outsourcing involves contracting the operations and responsibilities of a specific business process to a third-party service provider and focusing on the company's core competencies. BPO can typically be divided into back office outsourcing, i.e. internal business functions (e.g. accounting, finance, human resources) and front office outsourcing, which includes customer-related services (e.g. contact center/help desk services). Companies typically look to BPO for more time flexibility and direct quality control as well as cost efficiency. They will then be less constrained by large capital expenditures for people or equipment that may take years to achieve payback, may become outdated or turn out to be a poor match for the company over time.

Several crucial questions have to be answered:

  • What will be the strategic impact of a BPO decision?
  • What operating model will meet the needs of the company best (with a view to strategic, business and financial impacts and potential business risks)?
  • Is the organization ready to adopt this model?


Business process outsourcing concept for the industrial services unit of a chemical company:

  • Identifying potential outsourcing candidates/functions within the organization (with consideration of their importance for the core business and their contribution to the company's competitive edge)
  • Defining the outsourcing strategy (with a view to risk reduction and cost advantages)
  • Evaluating organizational readiness and establishing an internal provider management system